Although cash sales ticked up slightly in August, a
pattern that has been maintained for 14 of the last 15 years, that share of all
home sales continued to retreat on a long term basis. CoreLogic said today that cash sales had a
33.8 percent portion of the market in August, a less than one point uptick from
July and was down from a 36.4 percent share in August 2013. The percentage of cash sales has been lower
on a year-over-year basis every month since January 2013.
Prior to the housing crisis, the
cash sales averaged approximately 25 percent of all sales. They peaked in January 2011 when cash
transactions made up 46.3 percent of total home sales.
The largest share of cash
transactions were for the purchase of lender owned real estate (REO) at 56.9
percent. One third of existing home
purchases were paid for in cash as were 31.8 percent of short sales and 16.5
percent of new home sales. Despite the
frequency that cash was used to purchase REO those sales themselves represented
only 7.2 percent all home purchases in August so had little influence on
overall cash numbers.
CoreLogic said that the trend to
watch is the cash share of existing home or re-sales which at the peak in
February 2011 was 47.2 percent. It has now
fallen almost 14 percentage points. This
category will determine the direction of cash sales going forward as re-sales
now constitute 80.4 percent of all home sales.
Florida leads the states with a 49.8
percent share of cash sales followed by Alabama (48.9 percent), West Virginia
(45 percent), New York (44.4 percent) and Delaware (44 percent). West Palm Beach-Boca Raton-Delray Beach led
among the largest Core Based Statistical Areas with cash sales at 56.3 percent,
followed closely by Miami-Miami Beach-Kendall, (56.3 percent), Cape Coral-Fort
Myers, Fla. (55.3 percent), Detroit-Dearborn-Livonia, (54.9 percent) and Fort
Lauderdale-Pompano Beach-Deerfield Beach (54.8 percent).